The Monterrey Consensus stated that “debtors and creditors must share the responsibility for preventing and resolving unsustainable debt situations.” Member states emphasized the responsibilities of debtors to maintain sustainable debt levels and the responsibilities of creditors to lend in a manner that would not undermine a country's debt sustainability.
The Addis Agenda specifically:
- Reiterate that debtors and creditors must work together to prevent unsustainable debt situations
- Commit to work towards a global consensus on guidelines for debtor and creditor responsibilities in borrowing by and lending to sovereigns, building on existing initiatives
Latest developments
Multiple complementary sustainable financing initiatives are currently underway to promote responsible borrowing and lending. The IMF’s revised Debt Limits Policy, and the World Bank’s new Sustainable Development Financing Policy are both expected to take effect during the second half of 2020. Both policies aim for sharper alignment with the new borrowing landscape, including allowing opportunities to borrow (subject to safeguards); creating better targeting conditions at vulnerabilities; and supporting strengthened debt transparency and debt management. The International Institute of Finance has articulated Voluntary Principles covering debt data disclosures by private creditors. Given the potential for agency problems in borrowers—where borrowing may not always be duly authorized—disclosure by lenders is an important avenue to achieving accountability. The initiative is expected to come to fruition during 2020, upon identification of a host for the data, which would need to be accessible by the public.